California's spending boomed in recent years - from $38.9 billion in 1993 to $102.9 billion in 2008 - as lawmakers poured increasing amounts of money into state services.

But a crash in revenue collection that began 19 months ago forced lawmakers in the past two years to make the deepest cuts to the state's discretionary fund in the history of the Golden State.

Today, general fund spending stands at $84.5 billion and the state's per capita spending is $2,301 - down to what the state was spending per person 11 years ago, when adjusted for inflation, a Chronicle analysis of general fund budgets over the past 20 years found.

Spending is likely to continue to plunge in the coming years.

Gov. Arnold Schwarzenegger's administration last week predicted that next year's budget would have a $7 billion to $8 billion deficit, and Moody's Financial Services has projected as much as a $15 billion shortfall in coming years. Financial experts say the solution to the extreme fluctuations is simple: Lawmakers need to save money when revenues are up, perhaps even imposing a spending limit.

"If you give a politician a million dollars, he's going to find a way to spend it," said Robert Yetman, an associate professor at the UC Davis Graduate School of Management who specializes in tax issues and accounting. "There's very little incentive for a politician of any party to save excess revenues. There's no reward for that."

And spend is what lawmakers in California have done. Between 1994 and 2000, expenditures increased at about 8 percent a year, with 14 percent and 17 percent jumps in 1999 and 2000. Those spending sprees occurred as revenues in the state were exploding with the dot-com boom by as much as 22 percent a year in 1999-2000.

Growth slowed in the early part of this decade with the dot-com bust and the general fund even contracted slightly in 2003, but boomed again between 2005 and 2008, when the budget hit its peak at $102.9 billion.

However, Schwarzenegger has increased expenditures minimally, and much less than his predecessors. Of recent governors, Ronald Reagan oversaw the largest increases in spending at a yearly increase of 13 percent.

Pinpointing exactly where all the money goes is a complicated task, as lawmakers use myriad accounting maneuvers for spending depending on the circumstances in a particular year. For example, the Department of Housing and Community Development has had its general fund dollars cut significantly, from $85 million in 1989 to $9.4 million this year. But the department has received a big boost in money from the federal government that makes up that difference.

Spending patterns have also changed over time, with the state taking charge of expenses that previously were overseen by local and county governments.

And California has added social welfare programs, like Healthy Families in 1998 to provide health insurance for children that do not qualify for Medi-Cal. That program took a major hit in the budget cuts this year - about $178 million - and health advocates said it will result in about half-a-million children losing the insurance.

Still, the state has more people on welfare than anywhere else in the nation. Thirty-two percent of people receiving welfare in the United States are in California, according to the U.S. Department of Health and Human Services.

"What we've done is created incentives for people to move here just to take part in the generous social safety net," said UC Davis' Yetman.

Besides social services, spending has spiked in prisons and transportation over the past two decades. Funding for Caltrans actually increased this year, one of the few departments to escape cuts. The increase is due to Caltrans' general fund dollars being tied to Proposition 42's gas taxes - approved by voters in 2002.

The Department of Corrections has seen explosive growth over the past two decades, due mainly to an increasing inmate population, wages and benefits for staff and higher costs for prisoner health care, said Seth Unger, spokesman for the department. Prison spending, however, was cut this year by $1.8 billion, from $9.9 billion. Lawmakers have yet to decide how they will cut $1.2 billion of that.

Taxpayer advocates say the drop in spending after years of increases is not a surprise.

"Taxpayers have been warning for years that spending has been increasing at levels that simply aren't sustainable," said David Kline, spokesman for the California Taxpayers Association, a nonpartisan and nonprofit organization. The organization wants the state to adopt a spending cap and rainy day fund.

Those are two things the governor also wants. Schwarzenegger would like a 5 percent cap on annual increased spending with any remainder put in a rainy day fund. Such a proposal was rejected by voters in the May special election, though the plan was tied to extensions in tax increases.

Lawmakers also will consider changing the way the state collects taxes. Currently, most tax revenue comes from wealthy taxpayers. In good times, that means the state is flush with money, but in bad times it results in fiscal crises. A tax reform commission plans to make its recommendations on what the state should do in the coming weeks.

But actual change may be years away.

In the meantime, it's clear lawmakers will continue riding the wild fluctuations of California budgeting.

Assembly Speaker Karen Bass, D-Baldwin Vista (Los Angeles County) said she believes lawmakers will restore cuts to services once the state is out of the red.

"I do believe they will be restored but I don't think it will be for a couple years," after she leaves office, Bass said.

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